CANADIAN -

GENERAL ELECTRIC, COMPANY

I LIMITED

ANNUAL REPORT 1 9 4 4

PEAT, MARWICK, MITCHELL & GO. Chartered Accountants

25 King Street West, Toronto

February 21, 1945. To the Shareholders,

Canadian General Electric Compimy, Limited, Toronto, Ont.

\Ve have examined the Balance Sheet of the Cimndiiiu G~neritl Electric <k,nuumy, Lirmited, as of December 31, 1W4, and the ataten~ont 01 lnoon~e imd Earned Surplus for the year then ended, have reviewed the system ol internal control and the accounting procerlur*:~ of the Cornpany and, wit h- out. znaking a detailed audit of the tranasotiona, have examined or tested acoounting records of the Company and other supporting evidence, by n,ethoda and to the extent we deemed appropriate. . . Ihe onah and bank balances lwve heclt c;onfirmod by uount or by ccr- tificates irwn the depomitariea.

The numkotable and othor srwxilios were inspected or confirmed by ac;knowleddn~enta from the currtodia~nri.

\ V c ? have scrutinized tho aocounta and i~otca reccivablo nnd believe that: full proviaion has been nuide for possihlv los*ari throufih doubtful debts. Hequests for confirmation of imoountx rroeivahlr ware n~ailed iu a number of debtors, selected by us, and notifications ol exceptions were explained to our satisfaction.

Certified inventories of merchandise, work in prodreas and materials and supplies have been submitted to us. We have aatisfiod ourselves that these inventories have been taken in a careful manner, that ample allowance has been made for inactive and obsolete stock* and that they are con- servatively stated a t an amount not exceeding the lower of coat or market value, lens reserves. We reviewed the plan and system of control adopted lor inventory purposes and observed tho taking of the inventory with respect to certain itenla selected by us, thereby satisfyin6 ourselves that tho methods uf taking and recording the quantities were aurriod out eflcctively.

Expenditures charged to the property, plant and equipment i~ccounts during the year, in our opinion, wore proparly capitalized as rc?presonting additions or improvements. The provision for depreciation for the year appears to be adequate.

All ascertained liabilities have been included in the acaounta. The 1Jepartrnent of Munitions and Supply has indicated a desire to reneeotiate the profits attributable to war business; any additional refunds, however, reaultind therefrom will be la&ly recoverable out of inoomo and exceae profits taxes paid or accrued.

dividends received; such dividends were not in exresa of the Company's &are of the aggregate of the profits of all subsidiaries.

We report that, in our opinion, based upon such examination, the accompanying Balnnce Shert and related statwnrnt of Income and Earned Surplus are properly drawn op so as to exhibit, in conformity with generally accepted accounting applied on >I ba& conriiatmt with that of the precedins year, a true and correct view ol the state of the Company's &aim as of December 31, 1944, and the results of its operations for the year then ended, according to the best of our information and the explanations given to us and as shown by the books of the Company.

PEAT, MARWICK, MITCHELL & GO., Auditors.

STATEMENT OF INCOME AND EAKNED SURPLUS

YEAR ENDED DECEMBER 31, 1944

Income from operations, after deducting depreciation of $1,115,211.12, salaries of officials and legal expenses of $121,731.69, Directors' fees of $7,500.00 and trans- ferring $300,000.00 to working reserves $ 6,937,949.37

Income from investments.. . . . . . . . . . . . . . . . . 458,401.20 Profit from securities sold less transfer to . . secur~ties reserve. . . . . . . . . . . . . . . . . . . . . . . . . 24,206.25

Net income for the year before providing for income and excess profits taxes and trans- fer to reserve for post-war adjustments and contingencies. . . . . . . . . . . . . . . . . . . . . . . . $ 7,420,556.82

Provision for estimated income and excess . . . . . . . . . . . . . . . . . . . . . . . . . . . . profits taxes.. $ 5,300,000.00

Less: Post-war refund of excess profit^ taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 750,OW.OO

Transfer to reserve for post-war adjust- ments and contingencies.. . . . . . . . . . . . . . 750,000.00

. . . . . . . . . . . . . . . . . . . . . . . Net income for the year.. $ 2,120,556.82 Earned surplus as of January 1, 1944.. . . . . . . 11,604,540.84

Earned surplus available for dividends. . . . . . . . . . $13,725,097.66

Dividends on preferred stock. . $ 115,000.00 Dividends on common stock. . 1,510,760.00

1,625,760.00

Earned surplus as of December 31, 1944.. . . . . . . . . $12,099,337.66

CANADIAN GENERAL ELI BALANCE SHEET

ASSETS

Current assets: Cash on hand and in banks. . . . . . . . . . . . . . . $ 3,531,538.21 Dominion Government treasury bills.. . 2,997,180.00 Dominion Government bonds. . . . . . . . . . . . 8,197,400.00

(Quoted market value $8,218,650.00) Accounts and notes receivable, less reserve 6,316,216.88 Inventories a t not exceeding the lower of

cost or market value, as determined and certified to by the Management, less reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,371,655.14

%32,413,990.23 Less: Progress collections on contracts. . . 2,305,189.24

Total current assets. . . . . . . . . . . . . . . . . . . . . . $30,108,800.99

Other assets: Investment securities, less reserves. . . . . . . $ 1,702,454.85

(Quoted market value $2,152,002.15) Securities of subsidiary companies. . . . . . . . 578,981.31 Post-war refund of excess profits tax,

estimated. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,980,000.00 Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . 64,015.87

Total other assets. . . . . . . . . . . . . . . . . . . . . . . . 3 4,325,452.03

Fixed assets: Manufacturing plant, including land,

buildings and machinery; head office and branch office properties; a t cost. . $22,429,605.94

Less: Depreciation reserves. . . . . . . . . . . . . . 14,104,190.78

3 8,325,415.16 Patents and franchise.. . . . . . . . . . . . . . . . . . 1.00

Total fixed assets. . . . . . . . . . . . . . . . . . . . . . $ 8,325,416.16

Signed on behalf of the Board: D. C. DURLAND, DIRECTOR. H. M. TURNER, D r n e c ~ o ~ .

:TRIG COMPANY, LIMITED

DECEMBER 31, 1944

LIABILITIES Current liabilities:

Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . $ 3,101,395.45 Taxes payable, including provision for

estimated income and excess profits taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,610,773.84

Sundry accrued charges. . . . . . . . . . . . . . . . . . 1,227,045.77 . . . Dividend declared on preferred s tock. . 28,750.00

. . . . Dividend declared on common stock.. 377,690.00

. . . . . . . . . . . . . . . . Total current liabilities.. $ 8,345,655.06

Reserve for post-war adjustments and con- tingenciea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,980,000.00

General reserve. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,592,426.46

Capital stock: Special Employees' Preferred:

Authorized-50,000 shares, par value $50.00 each (callable a t par.)

. . . . . . . . . . . . . . . . . . Issued--46,000 shares. $ 2,300,000.00

Common : Authorized and issued-188,845 shures,

par value $50.00 each. . . . . . . . . . . . . . . . 9,442,250.00

Total ca~i ta l s~ock. . . . . . . . . . . . . . . . . . . . . . $11,742,250.00 - Earned surplus as of December 31,1944. . . . . . . . $12,099,337.66

The auditors' report to the Shareholders appears on the 6F8f page.

ANNUAL REPORT OF THE DIRECTORS TOTHESHAREHOLDERSOF

CANADIAN GENERAL ELECTRIC COMPANY, LIMITED TORONTO, CANADA APRIL 2, 1945

The Directors submit herewith the Balance Sheet of your Company as of December 31, 1944, and Statement of Income and Earned Surplus, certified by the Company's .Auditors, Peat, Marwick, Mitchell & Go., Chartered Accountants.

The volume of orders received during 1944 was approxi- mately the same as in the previous year, while sales billed were 7?4/2% higher than in 1943.

Production for war purposes continued through.out the year. The Company has manufactured a great variety of war equipment and special devices in addition to elec- trical and mechanical apparatus and supplies essential in the operation of Canadian war plants.

Plans for the resumption of the Company's normal operations are well advanced, including expansion and modernization of manufaoturing facilities to improve operating efficiency, qbality of products and commercial services.

Net income for the year, after deduction of all charges including depreciation and income and excess profits taxes amounted to $2,120,557, as compared with .52,009,303 for the year 1943, an increase of $111,254, or 5.5%.

Provision for estimated income and excess profits taxes was $5,300,000, of which $750,000 represented the post- war refundable portion. This amount was set aside as a reserve for post-war adjustments and contingencies, which added to the amount previously provided makes the total of such reserve $1,980,000.

Dividends on the Special Employees' Preferred Stock, at the rate of 5% per annum, amounted to $115,000. Dividends on the Common Stock, at $8.00 per share, totaled $1,510,760. Total dividends paid for the year were $1,625,760, the same as in the previous year, and the sum of $494,797 was added to Earned Surplus, making the balance in that account $12,099,338 at December 31, 1944.

The Company has no funded debt, notes payable, or other interest bearing obligations of any kind.

Total current assets were $30,108,801, a decrease of $266,662, while current liabilities totaled $8,345,655, a decrease of $1,490,470. The excess of current assets over current liabilitnes, or working capital, amounted to $21,763,146, an increase for the year of $1,223,808.

Cash, Dominion of Canada Treasury Bills, Governn~ent Honds and Investment Securities held at the close of 1944 totaled $16,428,573, an increase of $2,175,549. Accounts and notes receivable totaled $6,316,217, a decrease of $1,005,170, and inventories amounted to $11,371,655, a decrease of $1,960,202.

In accordance with the Company's established prac- tice, Government Bonds are carried in the Balance Sheet a t the lower of par or market value, investment securities are carried a t values not exceeding either cost or market, and securities of subsidiary companies are conservatively valued at 93578,981. Adequate reserves are provided for possible losses in receivables, and inventories are valued at an amount not exceeding the lower of cost or market value, with appropriate provision for obsolescence and shrinkage in value.

The Company's mwufacturin& plants and other properties have been maintained in excellent condition. During the year capital expenditures for additions and replacements amounted to $1,076,057, and depreciation for the year was $1,115,211.

In the year 1944 an amount of $600,000 was paid into the Canadian General Electric Pension Trust, making a total of $2,955,000 paid into this Trust by the Company.

Under the Company's group life insurance plan 89% of the employees at December 31, 1944, were carrying $13,293,575 of life insurance.

On December 31, 1944, the employees of the Company held 37,717 shares of the Special Employees' 5% Preferred Stock, having a par value of $1,885,850. An extra payment of 2% was made in 1944 to employees holding such shares under the Employees' Savings and Investment Plan. The annual offering of the special shares was suspended after

1940, in order to encournge the employees to invest their savings in Government Victory Bonds and War Savings Certificates.

During the war period the employees have subscribed an amount of $6,381,450 for Victory Loan Bonds, and have purchased $1,250,226 of War Savings Certificates and Stamps, a total of $7,631,676.

Employees to the number of twenty-eight hundred and eleven have enlisted in the armed forces and we honour the memory of forty-four who have made the supreme sacrifice.

The Directors and Officers a&ain take pleasure in expressin& their appreciation of the loyal and co-operative services rendered by the employees of the Company.

By order of the Board of Directors.

D. C. DURLAND, Chairman and President.

CANADIAN GENERAL ELECTRIC COMPANY LIMITED

BOARD OF DIRECTORS

H. C. COX - - - - - Tomnto,Ont .

D. C. DURLAND - - - - Toronto, Ont.

J. C. MACFARLANE, K.C. - Tomnto, Ont.

HON. F. B. MoCURDY - - Halifax, N.S.

R. S. McLAUGHLIN - - - Oshawa, Ont.

HON. W. D. ROSS - - - Toronto, Ont.

G. HARRISON SMITH - - Toronto, Ont.

GERARD SWOPE - - - - New York,N.Y.

H. M. TURNER - - - - Toronto,Oni.

MORRIS W. WILSON - - Montreal, Que.

EXECUTlVE OFFICERS

D. C. DURLAND, Chairman and President

Vice-Presidents

H. M. TURNER .I. C. MACFARLANE, K.C.

Comptroller Treasurer

C. E. HIPP E. I. JENKING

CANADIAN GENERAL ELECTRIC COMPANY 1,IMITED

HEAD OFFICE

212-218 KING STREET WEST, TORONTO. ONT.

RRANCH OFFICES

HALIFAX. N.S. FORT WILLIAM. ONT. SYDNEY, N.S. WINNIPEG, MAN. ST. JOHN, N.B. REGINA, $ASK.

QUEBEC. QUE. SASKATOON, SASK. MONTREAL. OUE. CALGARY, ALTA. SHERRROOKE, QUE.. EDMONTON. ALTA. OTPAWA, ONT. 1.ETHBRIDGE. ALTA. HAMILTON, ONT. TRAIL, B.C. LONDON, ONT. KELOWNA, B.C. WINDSOR. O W . VANCOUVER, B.C. NEW LISKEARD. ONT. VICTORIA, B.C. SUDBURY. ONT.

MANUFACTURING PLANTS

PETERBOROUGH WORKS DAVENPORT WORKS WARD STREET WORKS EDISON MAZDA LAMP WORKS VACUUM TUBE WORKS ROYCE AVENUE WORKS

CARROLOY WORKS ROGKFIELD WORKS

PE'mRBOROUGH, ONT. TORONTO, ONT. TORONTO, ONT. TORONTO, ONT. TORONTO, ONT. TORONTO, om. TORONTO, ONT.

LACHINE. QUE.